Author: Wilson Lee, core contributor of Biteye
Editor: Crush, core contributor of Biteye
In early July this year, the decentralized derivatives exchange SynFutures announced the launch of Base. In just three months, SynFutures has quickly risen to become the number one player in the Base derivatives market, occupying half of the Base derivatives market share in the entire Q3, once again attracting great attention from the market!
What are the innovations of SynFutures?
How does it attract users through incentive programs, and what are the recent participation methods worth joining?
In this article, Biteye will detail the core advantages, project progress, and participation methods of SynFutures.
SynFutures was launched at the end of 2021 and started to gain momentum in the first half of this year, relying on its pioneering permissionless contract market model, which allows anyone to add liquidity in 30 seconds through single-token, supporting perpetual contracts and expiration contracts, bringing users an ultimate experience.
In addition, SynFutures has a keen market sense and is committed to developing the Blast and Base ecosystems, and has successfully taken a leading position in both networks.
Since the launch of Blast in March and Base in July this year, the trading volume has cumulatively exceeded $180 billion, with nearly 300,000 unique addresses having traded on SynFutures.
Currently, it supports more than 45 trading pairs, in addition to mainstream coins like BTC and ETH, it also includes the MEME track that has been hot all year and the US election prediction-related market, truly returning the decision-making power of DeFi contract listing to the community.
01 Project Innovation: Oyster AMM
Derivative trading platforms face a series of problems: the simplicity of traditional AMMs allows everyone to list coins and market make, but there is a sacrifice in capital efficiency.
The order book model maximizes capital efficiency, but it cannot support arbitrary risk assets. Based on the original Oyster AMM (oAMM), SynFutures organically combines full-chain matching, full-chain order book, and AMM, compatible with the high capital efficiency of CeFi and the permissionless and decentralized features of DeFi, perfectly solving the above problems.
SynFutures' contracts have already been audited by QuantStamp.
Oyster AMM (oAMM), as the core of SynFutures, has three features: concentrated liquidity, full-chain order book empowered AMM, and a stabilization mechanism to protect users.
1.1 Concentrated Liquidity
In the oAMM, liquidity can be concentrated within a specific price range (similar to Uniswap V3), increasing the capital efficiency in that price range, allowing funds to be concentrated to support transactions within that range, rather than being dispersed across the entire price range.
In addition, oAMM also supports the addition of single-sided liquidity, where liquidity providers only need to provide a single type of token to participate in market liquidity provision, reducing the participation threshold and token risk.
oAMM achieves concentrated liquidity and allows the addition of single-sided liquidity through the following mechanisms:
Concentrated liquidity range: oAMM allows liquidity providers to concentrate their funds within a specific price range. This means that LPs can choose to provide liquidity in the price range they believe is most likely to see trading activity, rather than the entire price range (similar to Uniswap V3).
Utilizing virtual positions to simulate the trading process: In the oAMM model, when LPs provide liquidity (using the ETH-USDC trading pair as an example, when only USDC is provided), the system will create a corresponding virtual position in the background. This virtual position represents the exposure relative to the other asset (in this example, ETH). This method allows for single-sided liquidity provision while maintaining market balance.
1.2 Full-Chain Order Book Empowered AMM
Combining the full-chain order book and AMM is one of the important features of the oAMM model. "Full-chain" ensures the decentralization and security of transactions, while the "order book" further empowers the AMM, providing extreme liquidity depth and optimizing the user experience.
Full-chain order book means that all trading orders (buy and sell orders) are recorded and stored on the blockchain, and the matching between buy and sell orders is also done on-chain, rather than on a centralized server or a partially centralized system.
Clever implementation of the order book: oAMM allows users to provide liquidity at specified price points, thereby implementing on-chain limit orders, further simulating order book trading behavior and improving capital efficiency. Unlike off-chain order books like dYdX, oAMM is a smart contract deployed on the blockchain, with all data stored on-chain, allowing anyone to verify, completely decentralized, and users don't need to worry about the trading platform's opaque operations or fake transactions.
Extreme liquidity depth: There are not many AMMs that have implemented concentrated liquidity like Uniswap V3, etc. While the concentration of liquidity improves capital efficiency, it also places higher demands on the liquidity depth at the concentration points. Compared to the traditional AMM market making method, market makers in centralized exchanges are more familiar with and have a higher understanding of limit orders as a market making method, and are also more willing to participate in it. Therefore, the oAMM that supports limit orders can better attract market makers to actively market make, further improving the trading efficiency and trading depth of oAMM, achieving a trading experience comparable to centralized exchanges.
In summary, oAMM cleverly combines the full-chain order book with the AMM, implementing the most difficult liquidity problem of exchanges on-chain, while also having the advantages of on-chain transaction transparency, truly combining the advantages of DEX and CEX.
1.3 Stabilization Mechanism to Protect Users
SynFutures has also designed a set of mechanisms aimed at maintaining market stability and protecting user interests. These mechanisms, by preventing extreme market volatility and reducing unnecessary risks, ensure a healthy and fair trading environment.
Dynamic penalty fee: To prevent price manipulation and extreme market volatility, oAMM introduces a dynamic penalty fee mechanism. When a transaction causes the difference between the market price and the mark price to exceed a certain threshold, the transaction will be charged an additional fee. This fee increases as the price difference increases, thereby suppressing potential manipulation behavior.
Stable mark price: oAMM uses algorithms such as exponential moving average (EMA) to smooth market prices, reducing the short-term volatility caused by sudden news or market manipulation, which can lead to unnecessary liquidation risks. The stable mark price helps prevent unnecessary liquidations due to extreme price changes.
Through this series of mechanisms, SynFutures imposes costs on manipulation behavior, reducing the motivation to manipulate the market; at the same time, the price smoothing mechanism reduces the market's overreaction to sudden events or large-scale transactions, protecting users from unnecessary losses; in addition, SynFutures also reduces the unexpected liquidations caused by violent price fluctuations through a stable mark price and continuous funding rate, further enhancing user protection and effectively maintaining the market stability of the oAMM model.
02 Project Progress
2.1 Firmly Established in the Blast Ecosystem, Rewarding Users
Shortly after launching on Blast in March, SynFutres has already established its position as the number one derivatives trading platform in the Blast ecosystem. While providing users with an ultimate experience, it also offers users a generous incentive program, realizing user growth and retention.
At the launch of Blast, SynFutures announced the introduction of the O_O (Oyster Odyssey) point incentive program. SynFutures not only provides future SynFutures airdrops for O_O point holders, but also 100% rewards all Blast-related incentives (including points, yields, and additional developer token airdrops) to users.
Through a trading competition worth up to $500,000 and three-tier airdrop opportunities, SynFutures has provided users with strong motivation and rewards for participation.
In the Blast activities, Blast users, dYdX/GMX users, and Pudgy Penguin Non-Fungible Token users can directly receive the SynFutures O_O point airdrop upon registration on the first day of SynFutures' launch.
In addition, providing liquidity (including maker and AMM LP) and trading (Taker) can also earn Blast native token points rewards +50% of the Blast Big Bang Winner airdrop reward + SynFutures O_O points rewards, and traders can also earn additional trading competition rewards.
Users participating in the SynFutures Blast event said they have reaped a lot. Currently, the O_O incentive plan has also supported the Base network, and users can earn points rewards by trading and providing LP on the Base network.
2.2 Empowering the Base ecosystem, growth and innovation
SynFutures announced the launch of the Base network in early July this year, and by the end of September, SynFutures has already occupied an absolute leading position in the Base derivatives market, accounting for about 50% of the market share in Q3.
At the same time, SynFutures also announced the launch of the Vault product line on Base at the end of September, where users can provide single-currency liquidity to earn liquidity rewards, platform trading fees and O_O points rewards. The operation mechanism and features of Vault are as follows:
Deposit and management of funds: Users can deposit funds into the Vault, and the Vault will automatically provide liquidity and rebalancing operations in the corresponding market for them, and can also synchronously obtain points rewards.
Simplified market making process: Vault automatically executes the market making strategy, without the need for frequent operations by oneself compared to self-market making.
Risk diversification: Through different Vaults, users can allocate liquidity to different assets, thereby achieving portfolio diversification and reducing concentration risk.
Source: https://oyster.synfutures.com/#/vault/base/0x152d6356da0b84eb796247b03b3a17a791d83c42
Similar to the Blast points activity, providing LP and trading can also earn O_O points rewards, and with the launch of Vault, users now have an easier way to generate asset income through SynFtures and earn O_O points rewards.
In addition, more ways to earn points can be found on the SynFutures activity interface, which shows SynFutures' sincere intention to give back.
Source: https://oyster.synfutures.com/#/campaign
In the current activities, SynFtures also provides a points page to encourage users to rank, bringing more fun.
Source: https://oyster.synfutures.com/#/odyssey
From the chain data, Base is gradually becoming the growth engine of SynFutures, demonstrating SynFutures' flexible market adaptability, and also indirectly confirming the recognition of Base users for SynFutures' product experience and incentive plan.
Source: https://info.synfutures.com/
03 Core Advantages and Competitor Comparison
3.1 Market Position
Currently, several derivatives trading platforms have occupied a certain market position, such as dYdX, Hyperliquid, and GMX.
Observing the performance of major chain-based derivatives platforms on DefiLlama's Derivatives Volume since March, in the 3-9 month period, Hyperliquid and dYdX maintained a leading position in derivatives trading volume, basically maintaining around $1.5 billion in daily trading volume, SynFutures was able to achieve around $1 billion in daily trading volume, leading players such as Jupiter and GMX, placing it in the first echelon of the derivatives track.
Since September, due to market reasons, the trading volume of most derivatives platforms has declined, with Hyperliquid still occupying the first position with around $1.5 billion in trading volume, while Synfutures has surpassed dYdX with around $600 million in trading volume.
As the shortest-lived derivatives platform among them, its ability to quickly gain the current market position shows that it has already gained full market recognition.
SynFutures V3 derivatives trading volume situation, source: https://defillama.com/protocol/synfutures
GMX derivatives trading volume situation, source: https://defillama.com/protocol/gmx?volume=true
dYdX derivatives trading volume situation, source: https://defillama.com/protocol/dydx
Jupiter Perpetual Exchange derivatives trading volume situation: source: https://defillama.com/protocol/jupiter-perpetual-exchange
Hyperliquid derivatives trading volume situation, source: https://defillama.com/protocol/hyperliquid?derivativesVolume=true
3.2 Core Advantages
SynFutures' ability to achieve outstanding results in a short period of time is inseparable from its unique advantages:
A hybrid model of on-chain order book + AMM, with decentralization, deep liquidity and capital efficiency: dYdX and Hyperliquid rely solely on order books, which have high capital efficiency but limit the diversity of trading assets; while the point-to-pool model used by GMX is constrained by the bottleneck of LP in trading volume, lacks scalability, and the diversity of trading assets is also limited; SynFutures combines on-chain order books and AMM, with the decentralization and deep liquidity of DEX, and the capital efficiency close to CEX.
Listing rights belong to the community: The trading assets of other derivatives trading platforms are basically centralized decisions, while SynFutures allows the community to decide on the listing of assets, and can achieve 30-second permissionless listing; in the recent MEME craze, SynFutures quickly realized the listing of $BOME, leading the market rhythm.
Support any ERC-20 token as margin: SynFutures supports any ERC-20 token as margin for trading, while other platforms only support limited currencies such as USDC and ETH.
Full on-chain order matching: SynFutures places the order matching completely on-chain, ensuring the transparency of transactions and preventing market manipulation; while competitors like dYdX and Hyperliquid perform matching off-chain, still with potential centralized risks.
Airdrop and token issuance expectations: SynFutures V3 is currently focused on the Blast and Base ecosystems, providing users with deposit income, points incentives, and chain-related airdrops in various ways, which are not available on other platforms like dYdX and Hyperliquid. In addition, SynFutures is one of the few leading derivatives trading platforms that have not yet issued tokens, and the team has stated that they are researching token issuance, hinting at future token issuance and airdrop plans. The official website also stated that there will be corresponding rewards for users of the old version of SynFutures and participants in past activities.
Source: https://www.synfutures.com/
04 Team and Background
The founding team of SynFutures has backgrounds in top international investment banks, internet companies and crypto OGs, and has received the favor of investors including Pantera, Polychain, Standard Crypto, Dragonfly, Framework, SIG, Hashkey, IOSG, Bybit, Wintermute, CMS, and Woo, with total funding exceeding $38 million to date.
Source: https://www.rootdata.com/Projects/detail/SynFutures?k=MzAyMA%3D%3D
05 Summary and Outlook
In the fierce competition in the decentralized finance (DeFi) derivatives market, SynFutures has stood out significantly with its innovative technology and strategies.
By introducing a fully on-chain order book and matching mechanism, a unified liquidity model, and a focus on user protection stability mechanisms, SynFutures not only provides users with a secure, transparent and efficient trading environment, but also ensures its competitiveness and attractiveness in the industry.
In addition, through generous incentive programs and deep investment in the Blast and Base ecosystems, SynFutures has demonstrated its commitment to long-term development and ecosystem building.
The generous airdrop rewards, trading competitions, and the continuous innovation of products like Vault have not only attracted a large number of users to actively participate, but also injected new vitality into the market. This feedback to users and ecosystem partners has strengthened the connection between SynFutures and its users and ecosystem, promoting the sustained prosperity of its ecosystem.
Through technological innovation, user protection mechanisms, incentive strategies, and a clear future plan, SynFutures has successfully built a trading platform that is both secure and reliable, as well as vibrant. These advantages not only enable SynFutures to meet the current needs of users, but also allow it to anticipate and adapt to future market changes, indicating its continued leadership in the decentralized trading platform field.
